"They are a manipulator, grand master level," Mr. Trump said Thursday in a speech at the Economic Club of New York. “I am going to instruct my Treasury Secretary to label China a currency manipulator, and to apply tariffs to any country that devalues its currency to gain an unfair advantage over the United States.”

Few U.S. economists would disagree China kept the yuan undervalued over the last two decades.

But many economists--including some of the strongest advocates for action against Beijing--say the yuan is now close to fair value. Beijing appreciated the yuan from 2005 to 2014.

Now, China’s economy is cooling and many analysts fear growth could slow substantially. Those worries are putting strong downward pressure on the currency.

In fact, over the last two years, Beijing burned through nearly a quarter of what was once a $4 trillion currency stockpile to prevent the yuan from falling against the dollar. The yuan has still weakened against the dollar as the U.S. economy strengthened and the Federal Reserve signaled an end to its cheap-money policies. But it hasn’t fallen nearly as fast or as far as many expected it could or should go. That effort actually prevents the U.S.-China trade deficit from worsening.

More broadly, it is also hard to pin down motive – when a country's depreciation is designed to gain a competitive advantage. Of course, one could use the flexible concept: “I know it when I see it.” But that could leave the U.S. exposed to accusations of currency devaluation.

Last year, Congress struggled to write new laws to punish currency manipulators because of that problem. The U.S. risked putting itself in violation of its own laws. The Fed could come under scrutiny by other countries: The easy-money era, for example, had depressed the greenback’s value as the central bank ran its digital printing presses to boost growth.

One of Mr. Trump’s solutions is to slap China and other offending countries with hard-hitting tariffs on imports. But that, warn many economists and former trade officials, could start a dangerous tit-for-tat trade war that only harms the broader U.S. economy.